As the coronavirus topples the economy, you may be wondering how to use your stimulus check…
The economy’s faring far worse than anyone expected.
Since January, I’ve been closely monitoring the COVID-19 pandemic. People thought I was being paranoid.
The sheer amount of information surrounding the pandemic can make it difficult to separate fact from fiction.
We still know so little about the virus, and, best case, we’re 18 months away from a vaccine. We run the risk of overwhelming our medical systems and some hospitals are running low on critical medical supplies.
The world isn’t doing well. People are struggling. The stock market tanked. Everyone is scared.
The long-lasting effects of this pandemic will haunt a generation. Fortunately … we may finally be making the turn for the better. The virus isn’t going away, but the worst might be over.
I’ll get to top ways to use your stimulus check (if you qualify) in a bit. First, let’s take a look at…
Table of Contents
- 1 How Coronavirus Paralyzed Our Economy
- 2 You Aren’t Alone
- 3 What Can You Do With Your $1,200?
- 4 A Light at the End of the Tunnel
- 5 Together, We’ll Persevere
According to the Worldometer coronavirus page, there are over 1.4 million cases worldwide. Despite the drastic measures taken by countries around the world, we’ve failed to stop the spread of the coronavirus. But…
We slowed its progress.
Most states have declared mandatory stay-at-home orders. Businesses, restaurants, and schools are shut down. Social distancing is the new norm.
We’re living in a nightmare I never thought would happen.
The world pressed the pause button. And yet…
Your bills keep rolling in.
In the two weeks since the lockdown orders began, almost 10 million workers have filed jobless claims. Let’s put that into perspective … At the peak of the 2008 financial crisis, 15 million people filed jobless claims. We’re less than a full month into this fight.
And analysts are advising people to brace for the deepest recession on record.
I’m not a fan of fearmongering, but I’m a realist. The economy is in deep trouble.
The coronavirus won’t magically disappear. Experts are predicting the peak of new cases in the U.S. is still weeks away.
Even if we discover a vaccine next month … the emotional impacts and societal changes we’ve experienced can’t be undone.
Many people’s jobs disappeared in the blink of an eye. One minute everything seemed fine … the next, we’re paralyzed with fear and tight on cash.
Consumer spending won’t return to pre-coronavirus levels for months … maybe even years.
Think I’m kidding? My own imposters are so desperate that they’ve started asking me for cash…
— Timothy Sykes (@timothysykes) March 29, 2020
Last month, they were scamming people using my name. Now, since people don’t have excess funds, they’ve resorted to begging me.
I feel for people. I’m doing everything in my power to help as many people as I can. But if you’re trying to impersonate me and ask my students for money … I’ll NEVER help you.
PSA: I don’t manage other people’s money. If you see an account that looks like me asking for money or promising huge returns, report it. It’s not me — it’s a low-life scammer. Check out this short video I made about it:
Pardon my rant. I hate imposters. Don’t steal, instead…
Make Something of Yourself
I understand times are hard. I know you may be struggling, but resorting to a crime is NOT the answer.
Money is tight. Spend as little as possible … especially if you can’t go a few months without a paycheck.
The good news? You don’t need money to start your trading journey.
Yes, you need money to trade … but you can start studying for free. And building your knowledge account is the smartest way you can start in the markets.
Here’s a shortlist of NO-COST content to help you get started:
- I have over 1,300 videos on YouTube alone. It’ll take you weeks to comb through all the golden nuggets here.
- I’ve lost track of the insane amount of free content I’ve put out on my blog over the years. Keep reading. Every article and lesson can bring you one step closer to your trading goals.
- Learn the basics of penny stocks here — it’s 11 chapters of solid information and completely free.
- Download a copy of my book “An American Hedge Fund” for free to learn how I got started trading low-priced stocks.
- Check out the SteadyTrade podcast with StocksToTrade’s lead trainer Tim Bohen. It covers everything from trading basics to advanced indicators. There are also some great interviews with me and some of my top students.
I also just released my Volatility Survival Guide. It focuses on how to trade through wild volatility — just like what we’ve seen with the recent coronavirus trading opportunities. The guide is about two hours, with trade examples and what I’m looking for in a coronavirus economy.
My goal is to help people. In light of that, please remember…
You Aren’t Alone
It’s time for us to come together.
Everyone’s struggling in some fashion — some more than others. Thankfully, the U.S. government passed the CARES Act to help those of us who are hurting the most.
Under the $2 trillion stimulus package, many American citizens will receive checks that can help them pay expenses.
Qualifying individuals will receive $1,200, married couples up to $2,400 and $500 for each additional child. But not everyone will receive a check. Visit TaxFoundation.org to learn more.
And if you do qualify, ask yourself…
What Can You Do With Your $1,200?
The answer to this question depends on your situation.
Let me pause here to remind you that I’m not a financial advisor nor am I giving you financial advice. All trading and investing is inherently risky. Always do your due diligence.
The first thing you need to consider is whether you’re still able to work and if your income has changed.
If you aren’t working, do you qualify for unemployment? How much money do you have saved?
Can you survive another two to three months of no work? Even if you have a job right now, what if you get laid off or your hours are cut?
It’s critical to prepare. I tell all my students that preparation is the key to success in trading — it’s the same in life.
If I was in any of these situations, here’s what I would do.
Living Paycheck to Paycheck With No Savings
Don’t use your check on entertainment or unnecessary items.
You’re getting a stimulus check to help you cover your essential payments. Be smart and take care of yourself.
It may be difficult for a while, so ration your money as best you can. Only spend money on essentials and cut costs where you can.
Living With Some Savings or Some Debt
Even if you think you have enough in savings … double-check. Most advisors recommend you have six months of savings. If you don’t, add this check to your rainy-day fund. Who knows how long we’ll be in this situation.
If you have enough savings, this stimulus check is a great time to pay off some debt. Americans currently hold $1 trillion in credit card debt.
This isn’t the time to put a down payment on a new car or buy a new TV. Take the responsible path. Set your future self up for success.
Living Comfortably with 6+ Months of Savings
If you’re fortunate enough to have ample savings, you may have some options.
It’s important to prepare for the worst — so it’s still not a terrible idea to save the money from the stimulus check.
Personally, I’d donate the check to a reputable charity. Booker T. Washington said it best…
“Those who are happiest are those who do the most for others.”
There are literally people starving because of this pandemic. In some cities, food bank lines are stretching over a mile.
In my humble opinion, the stimulus check would better serve my community than my bank account. It may not be enough to stop COVID-19, but it could help families in need.
At the beginning of March, I pledged to donate all my trading profits to Direct Relief. This organization provides healthcare workers with protective gear and masks.
I profited roughly $40,000 in March* (see all my trades on Profit.ly). Then, I partnered with Karamagawa to donate $50,000 to Direct Relief. Here’s my Instagram post about Karmagawa’s donation.
(*Please note: my results are not typical. I’ve spent years developing exceptional skills and knowledge. Always remember trading is risky. Never risk more than you can afford.)
Times are scary … but we’re moving in the right direction. We’re starting to see…
A Light at the End of the Tunnel
Individuals and companies are stepping up big. As terrifying as the last couple of weeks have been, we’re coming together as a community.
Here’s a great example … New England Patriots owner Robert Kraft and his son used the team plane to transport 1.2 million N95 masks from Shenzhen, China to the U.S.
These kinds of deeds help protect our medical staff as they work tirelessly to treat the ill.
Bill and Melinda Gates gave an even larger contribution through their foundation. Microsoft’s billionaire founder pledged to build and fund seven vaccine factories to accelerate the process of finding a COVID-19 vaccine. The seven factories will be used to manufacture and test seven of the leading vaccines.
This sizable contribution brings tears to my eyes. Out of the seven factories, only one will be successful — meaning the other six factories will cost Gates billions.
Gates explains, “a few billion in this, the situation we’re in, where there’s trillions of dollars … being lost economically, it is worth it.”
Watch Gates’ full explanation for his donation in this clip from “The Daily Show” (currently “The Daily Social Distancing Show,” appropriately).
Bill and Melinda will be remembered for their generosity for generations.
Together, We’ll Persevere
We’re living in unprecedented times. No one knows what will happen next.
We can rebuild the economy. But we can’t bring back a lost loved one. Life is precious. Cherish every moment.
I sincerely hope each and everyone one of you is staying safe and healthy.
It’s truly beautiful to witness the world coming together.
We’re innovating faster than ever. People, companies, and governments are stepping up to support each other. Stay strong.
We’ll get through these troubled times together.
Let’s keep the conversation going. What are some touching moments you’ve seen in your community? I love to hear from my readers!